Reference Guide
Co-Ownership Glossary
A working glossary of the legal, tax, operational, and structural terms that come up when buying a fractional co-ownership share — particularly across European jurisdictions. Definitions favour operational clarity over textbook precision; for legally consequential decisions, consult a qualified local advisor.
Legal structures
#Fideicomiso
A Mexican bank trust through which foreign nationals can hold property in Mexico's restricted coastal and border zones (within 50km of the coast or 100km of a border).
Mexican law restricts direct foreign ownership of property in these zones. The fideicomiso routes ownership through a Mexican bank as trustee, with the foreign buyer as beneficiary. The buyer has full rights of use, sale, transfer, and inheritance — comparable to direct ownership for practical purposes. For fractional ownership of Mexican coastal properties, the fideicomiso is the standard structure.
#Indivision
A French legal arrangement under which multiple parties jointly own a single asset without a formal company. Common in French inheritance where siblings receive joint ownership of a family property.
Indivision is informal joint ownership — each co-owner holds an undivided share. Decisions about the property typically require unanimous consent, which creates friction. Modern fractional ownership replaces informal indivision with a written ownership agreement precisely to avoid that friction: clear voting thresholds, standardised governance, and structured exit.
Ownership terms
#1/8 share
The most common share size in modern fractional co-ownership: one-eighth of the property, entitling the owner to around six weeks of private use a year, depending on the home.
A 1/8 share is sized to match the realistic annual usage of most second-home buyers — research consistently finds the typical second-home owner uses their property roughly 35 days per year. The 1/8 model produces eight equal shares per property. Some companies also offer 1/4 and 1/2 shares for buyers wanting more usage time.
#Co-owners' first chance to buy
When an owner sells a share, they set the price, and the other co-owners of the same home get the first chance to buy at that price; if they pass, the share goes on the open market.
It gives the existing owners of a home a say in who joins them, without holding up the seller: the price is the seller's, and the open market is the next step if no co-owner buys. How it works for a particular home is set out before you buy.
#Co-ownership
An umbrella term for arrangements where multiple parties hold ownership rights in the same property. In a fractional context, co-ownership means each owner holds a real share of the home within an organised, professionally managed arrangement, rather than informal joint title.
Co-ownership and fractional ownership are typically used interchangeably in the modern fractional category. The terms emphasise the same structural reality: a small group of owners (usually up to eight, occasionally more) sharing equity, usage, and ongoing costs of a single luxury property.
#Fractional ownership
A property-ownership model where multiple buyers each own a real share of a property. Each owner has rights to use the property for a defined period each year proportional to their share.
Modern fractional co-ownership is distinct from timeshare: you own a real share of the home, not a right to use it; the share rises and falls in value with the property, and it can be sold or passed on to your heirs. Typical share size is 1/8, giving around six weeks of use a year, depending on the home. Most companies in the category use professional property management bundled into the model.
#Timeshare
A property-use product where the buyer purchases the contractual right to use a property for a defined period each year — typically one week, sometimes flexible points — without owning any real estate.
Timeshare is structurally distinct from fractional co-ownership: the buyer owns a contract, not a share of the property. Most timeshare contracts have no real-estate equity, do not appreciate with the property market, and are notoriously difficult to resell — an entire industry of 'timeshare exit companies' exists specifically to help owners dispose of unwanted contracts. Disney Vacation Club is the most-cited exception, using a right-to-use structure backed by real estate, with stronger resale dynamics.
#Whole ownership
The traditional model of property ownership: one owner (or one couple, family, or entity) holds 100% of the property title.
Whole ownership commits 100% of the capital to one property, with the owner responsible for all running costs and management. Compared to a 1/8 fractional share at the same property value, whole ownership requires 8x the capital, produces unlimited usage rights (though realistic use typically lands around 35 days per year per industry data), and exposes the owner to the full operational burden of cross-border property management.
Costs and fees
#Cost pass-through
The model where co-owners pay their proportional share of the property's actual running costs — management, insurance, local taxes, utility standing charges, maintenance, and reserve-fund contributions — without a company margin added on top of those costs.
Cost pass-through is the standard model for the property-operating component of fractional annual fees. A 1/8 owner pays 1/8 of the property's real running costs; the company earns from the separately disclosed service fee (or a one-time fee at purchase) rather than from a markup on running expenses. Costs scale with the property — a more expensive villa has higher absolute costs — but the cost-share ratio stays consistent.
#Notaire fees
Fees charged by a French notaire for executing real-estate transactions. Combined with associated transfer taxes, the total typically runs 7–8% of the property purchase price for second-hand French property.
In conventional French property purchases, the notaire fee covers the notaire's professional services plus the various transfer taxes and registration fees that pass through the notaire. For a fractional share, the fees and taxes due depend on the home's legal set-up, which our partner explains before you buy; ask for the figures for the specific home in writing.
#Reserve fund
A pooled cash reserve held for the home to cover future major repairs, replacements, and capital expenditures without requiring surprise assessments from owners.
The reserve fund is funded through annual contributions built into the cost pass-through. Major repairs (HVAC replacement, roof work, structural maintenance) are paid from the reserve rather than triggering one-off cash calls. Reserve adequacy is one of the items disclosed in pre-purchase documentation; under-reserved properties can lead to special assessments down the line.
#Service fee
A fee paid by fractional owners to the operating company for ongoing platform services, technology, owner support, and company administration. Distinct from the property's actual running costs.
Companies structure service fees differently: some publish a flat fee per share (e.g., a fixed amount per month per share), others charge a percentage of property value annually, others bundle a one-time service fee into the primary purchase price. The service fee is separate from the cost pass-through of the property's actual running expenses (insurance, taxes, utilities, maintenance).
#Special assessment
A one-off cash levy on owners beyond the standard annual fees, typically called when reserve funds are insufficient to cover a major repair or unexpected capital expense.
Special assessments are common in both timeshare and certain whole-property HOA contexts; in well-managed fractional co-ownership they are rare because reserve funds are sized to absorb major repairs. Where a property does require an assessment, it is shared proportionally among co-owners according to share size. Pre-purchase disclosures typically include the property's assessment history.
#Stamp duty
A tax levied on real-estate transactions in various jurisdictions, typically calculated as a percentage of the purchase price. UK Stamp Duty Land Tax (SDLT) and Spanish ITP (Impuesto de Transmisiones Patrimoniales) are common examples.
Conventional second-home purchases trigger stamp duty on the full property value at the time of purchase. For fractional co-ownership, how tax works depends on the country and the home's legal set-up, which our partner explains before you buy; we recommend independent advice.
Tax terms
#Beckham Law (Spain)
Spain's special tax regime (formally the Régimen de Trabajadores Desplazados, often called the 'Beckham Law' after the footballer who used it) for individuals who become Spanish tax residents through work, allowing them to be taxed under modified rules for up to six years.
The Beckham Law applies to individuals who relocate to Spain for work and meet specific eligibility criteria. It can be relevant context for non-Spanish buyers considering Spanish residency, but does not directly apply to non-resident owners of fractional Spanish property who remain tax-resident elsewhere.
#Capital gains tax
Tax on the gain realised when an asset is sold for more than its cost basis. Applies to fractional shares when sold at a gain, with rates and mechanics determined by the property's jurisdiction and the seller's residency.
On the sale of a fractional share, the gain (sale price minus cost basis minus eligible costs) is typically taxable in the property's country, often via a withholding mechanism for non-resident sellers, with reconciliation through a local tax return. Treaty arrangements between the property's country and the seller's home country may affect the final tax position.
#IBI (Impuesto sobre Bienes Inmuebles)
Spain's annual local property tax, levied by the municipality where the property is located. Rates vary by region and typically run 0.4%–1.1% of the property's cadastral value (which is usually well below market value).
IBI is paid annually by the property's owner. In fractional co-ownership, IBI typically flows through the cost pass-through, with each co-owner contributing their proportional share. Owners don't pay IBI separately; it's bundled into annual operating costs.
#IFI (Impôt sur la Fortune Immobilière)
France's wealth tax on real-estate holdings. Applies to French tax residents on their worldwide property and to non-residents on their French property, with a current threshold of €1.3 million in net property value.
IFI taxes the net value of in-scope property above the €1.3M threshold at progressive rates (0.5%–1.5%). For non-resident buyers, only French property counts toward the threshold. A non-resident with a 1/8 share of a €5M French villa holds €625k of French real estate — below the IFI threshold for many buyers. Whole ownership of the same villa would put the buyer well into IFI territory.
fr.wikipedia.org/wiki/Imp%C3%B4t_sur_la_fortune_immobili%C3%A8re
#IMU (Imposta Municipale Unica)
Italy's annual municipal property tax. Applies to second homes and high-value properties; the primary residence is generally exempt for Italian residents.
IMU rates vary by municipality and are calculated against the property's revalued cadastral income. For non-resident owners of Italian second-home property — including fractional shares — IMU applies to the full property value, with each co-owner contributing proportionally through the cost pass-through.
#NHR Regime (Portugal)
Portugal's Non-Habitual Resident tax regime — a preferential 10-year tax status for individuals who become Portuguese tax residents, offering reduced rates on certain foreign-source income.
The NHR regime has been significantly restructured in recent years; the version available to new applicants today differs from earlier vintages. For non-resident buyers of Portuguese fractional property who are not planning to become Portuguese tax residents, NHR is not directly applicable — but it remains relevant context for buyers considering Portuguese residency.
#Patrimonio (Spanish Wealth Tax)
Spain's wealth tax on net wealth (including real estate) above defined thresholds. Rates and thresholds vary by autonomous community — Madrid effectively does not levy it, while several other communities do.
For non-resident buyers of Spanish property, Patrimonio applies to the net value of Spanish-located assets, with the threshold and rates set by the autonomous community where the property is located. Fractional ownership keeps the asset value below thresholds for many buyers who would otherwise face Patrimonio under whole ownership of the same property. Specific liability depends on the property's location, the buyer's residency, and any applicable treaty.
#Sucesiones (Spanish Inheritance Tax)
Spain's inheritance and gift tax, regulated nationally but administered with significant variation by autonomous community. Rates depend on the heir's relationship to the deceased and the heir's residency.
Spanish-located assets are subject to Sucesiones on the heir, regardless of where the heir lives. Several autonomous communities offer substantial reductions or exemptions for direct-line heirs (spouses, children, parents). For non-resident heirs of Spanish fractional shares, specific liability depends on which autonomous community the property sits in and the heir's relationship to the deceased.
#Taxe foncière
France's annual property tax, paid by the owner of the property regardless of who occupies it. Calculated against the property's cadastral rental value.
Taxe foncière rates and absolute amounts vary by commune. In fractional ownership, it typically flows through the cost pass-through proportionally. The related taxe d'habitation has been largely phased out for primary residences but can still apply to second homes in some communes.
Operational terms
#Cooling-off period
A defined window after signing a purchase contract during which the buyer can withdraw without financial penalty. Mandatory under various jurisdictions' consumer-protection law.
Cooling-off windows vary by jurisdiction: the EU's timeshare directive mandates a 14-day cooling-off period for timeshare contracts; French property purchases typically include 10-day SRU cooling-off plus additional windows depending on contract structure; US states have varying windows. For fractional co-ownership, the specific cooling-off rules depend on the property's country and the structure of the purchase agreement.
#Home swap / exchange network
A mechanism that lets a fractional owner stay at another property — typically another property within the same company's portfolio — in exchange for making their own allocated weeks available to the network.
Exchange networks let owners use their annual allocation across multiple destinations instead of always at one property. Mechanics differ by company: some run direct 1:1 swaps where two owners trade stays, some run points-based systems where publishing a week earns credits redeemable against any other published week, and some run concierge-mediated matching. Exchange access is typically internal to each company's network.
#Liquidity window
A defined period during which a fractional owner has structured access to a specific resale or exit mechanism, with the company providing pricing, marketing, and transaction support.
Some companies publish multi-window liquidity frameworks: a first window after the minimum holding period, an ongoing open window for standard market-rate resales, and a long-term window for committed long-term holders. The framework gives owners predictable exit paths at multiple horizons.
#Lombard loan
A loan secured against an existing investment portfolio (stocks, bonds, funds) held at a bank, with the bank lending against the pledged portfolio's value while the borrower retains the underlying investment returns.
Some fractional ownership companies have arranged Lombard-loan facilities through partner banks to support buyers who hold investment portfolios. The bank lends against the pledged portfolio rather than against the property itself, allowing buyers to finance their fractional share without liquidating investments. Eligibility depends on the bank's acceptance of the buyer's portfolio composition.
#Minimum holding period
A defined period after purchase during which a fractional owner cannot resell their share. Used by some companies on some properties to discourage speculative short-term flipping.
Minimum holding periods are property-specific and disclosed in pre-purchase documentation. A common pattern is a 12-month holding period from purchase before the share becomes eligible for the company's resale process. After the minimum period elapses, owners can list their share on the standard resale pathway.
#Peak weeks
The highest-demand booking periods at a property — typically Christmas/New Year, school half-terms, Easter, and peak summer (July/August in Europe; varies by destination).
Because all co-owners want peak weeks, the rotation calendar mechanic ensures equitable access over a multi-year cycle rather than first-come-first-served allocation. Some companies allow owners to swap or trade peak-week allocations with other co-owners through their booking platform.
#Rotation calendar (fair-rotation)
A scheduling system used to allocate peak-demand weeks across co-owners equitably over time. Combines fixed seasonal allocations with rotating priority for high-demand dates.
Rotation calendars handle the structural problem that all co-owners want the same peak weeks (Christmas, school half-terms, peak summer). The system rotates priority annually so no single owner always gets the same dates — over a multi-year cycle, owners access peak and shoulder weeks roughly equitably. Most modern companies administer the calendar through their owner app, with co-owners booking specific dates within the priority structure.
#Supported resale
A resale process administered by the fractional ownership company on behalf of the selling owner. The company markets the share through its existing prospect pipeline and coordinates the transaction.
Supported resale is the standard exit mechanism for fractional co-ownership. The selling owner notifies the company, who provides pricing guidance based on market data, markets the share to qualified prospects already familiar with the company and the property type, and coordinates the share transfer through the relevant legal process. You set the price; your co-owners get the first chance to buy at that price, and if they pass, it goes on the open market. How long a sale takes depends on the home and the market.
Buyer & residency terms
#Golden visa
Residency programmes offered by various countries allowing high-net-worth investors to obtain residency permits in exchange for qualifying property or capital investments. Programmes vary by country and have undergone significant reform in recent years.
Golden visa programmes in Portugal, Spain, Greece, and elsewhere have historically been used by international buyers acquiring real estate above defined thresholds. Eligibility, thresholds, and the role of property investment have changed significantly since 2023 — Portugal removed property investment from its golden visa scheme, Spain announced a phase-out, and others have restructured. For fractional co-ownership specifically, the buyer's share would generally need to exceed the programme's minimum threshold to qualify.
#NIE (Número de Identificación de Extranjero)
Spain's foreign-identification number, required for foreigners (residents and non-residents alike) to conduct most administrative and legal actions in Spain — including buying property, opening bank accounts, and filing taxes.
Non-Spanish buyers of Spanish fractional shares must obtain an NIE before completion. Application is typically through a Spanish consulate in the buyer's country of residence, or via a Spanish lawyer or gestor by power of attorney. Most fractional ownership companies selling Spanish properties coordinate NIE applications as part of the buyer onboarding process.
en.wikipedia.org/wiki/N%C3%BAmero_de_identificaci%C3%B3n_de_extranjero
#Non-resident buyer
A buyer who is not tax-resident in the country where the property is located. For European fractional purchases, this typically describes British, American, or other international buyers acquiring properties in Spain, France, Italy, Portugal, etc.
Non-resident status affects tax treatment (wealth tax thresholds, capital-gains mechanics, inheritance rules), administrative requirements (NIE in Spain, equivalents elsewhere), and operational matters (Schengen day-count rules for stays in EU properties). Most companies have established workflows for non-resident buyer onboarding.
#Schengen 90/180 rule
The rule limiting non-EU/EEA visitors to a maximum of 90 days in the Schengen Area within any rolling 180-day period without a visa or residency permit.
Post-Brexit British buyers and US buyers of European fractional shares are subject to the 90/180 rule across the Schengen Area as a whole (not per country). For a 1/8 share owner using around six weeks a year at a single European property, the rule is comfortably within allocation. Buyers acquiring multiple European fractional shares need to track cumulative Schengen days to avoid exceeding the cap.
Property & transaction terms
#Bel-étage (Parisian architecture)
The 'beautiful floor' of a classic Parisian Haussmannian building — historically the second or third floor, with the highest ceilings, the most ornate balconies (typically a continuous wrought-iron balcony), and the largest windows.
In 19th-century Haussmannian Paris, the bel-étage was the most prestigious floor because it was accessible without stairs from the ground in an era before elevators, while sitting above the noise and dust of the street. Modern buyers of central Parisian property — including fractional buyers — pay a meaningful premium for genuine bel-étage apartments because of the ceiling height, balcony, and original architectural detail.
#Concierge / property management
Professional services that handle the operational aspects of property ownership — housekeeping, maintenance, utilities, local tax compliance, pre-arrival preparation, guest services, and emergency response — on behalf of the owner.
Concierge / property management is bundled into fractional co-ownership; the management company is typically engaged on behalf of the co-owners and paid through the annual cost pass-through. For whole-property owners, the equivalent service must be self-arranged or contracted separately — adding meaningful time and cost. The bundled-management model is one of the primary operational advantages of fractional ownership versus whole ownership of a comparable property.
#Conveyancing
The legal process of transferring property ownership from one party to another. Involves title searches, contract drafting, registration with relevant authorities, and payment of associated fees and taxes.
Conventional property conveyancing is the costliest and slowest part of a second-home resale. With fractional co-ownership, resale is handled through our partner's resale process, so you can sell your share without the whole house having to be sold.
#Vacation rental
A property rented out short-term to vacationing guests, typically through platforms like Airbnb, Booking.com, or Vrbo — distinct from long-term residential leasing.
Vacation rental is an alternative to ownership for buyers seeking flexibility — paying for accommodation as needed rather than committing capital. Compared to fractional co-ownership, vacation rental requires no upfront capital, builds no equity, and offers no consistency of property. For buyers with low annual usage (under three weeks per year) or strong preference for destination variety, pure rental may produce better lifestyle utility per dollar than any ownership model.
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